World Bank view of India’s foreign aid requirement

Washington, March 11: Some details are now available of the World Bank report prepared for the members of the Aid India Consortium, who will be meeting in Paris next month. The report has made the gloomy forecast that unless India is able to obtain $12 billions in foreign assistance, and import ten million tonnes of foodgrains in the next fiveyear period, serious economic consequences will follow.

The report differs from the Indian planners’ calculation that India will need only $5 billions of outside assistance in the next five years, to tide over the crisis posed by a combined shortage of food, fertilizers and oil. “Food stocks in the public distribution system are negligible; current availabilities have been severely reduced, prices are rising sharply and active discontent is spreading,” says the report, describing the food situation in India, three years after the country set out to be selfsufficient.

Referring to the effect of rising oil prices, the Bank report states that “the increase is so large and sudden that unless the assurance of obtaining additional financing is forthcoming soon, the Government will have to make immediate and downward adjustments in oil and other imports, which can only have a disruptive effect on growth. Any reduction in fertilizer availability, through lack of imports, would affect the country’s ability to meet its food needs in the coming year. If the monsoon were to fail in 1974, there would be a famine of grave proportions.”

To narrow the projected gap, the Bank economists, who had prepared the report, say that both Western and Eastern nations, as well as the oil producing countries, must make substantial amounts of foreign assistance available to India. It believes that the oilproducing States’ share of the $12 billions aid India would need over the next five years, would come to $3 billions, contributed either directly or indirectly.